Fourth Circuit Court Vacates Injunction Against DEI Executive Order

On February 6, 2026, the U.S. Fourth Circuit Court of Appeals vacated a preliminary injunction that had blocked parts of two Trump administration executive orders (14151 and 14173) aimed at curbing diversity, equity and inclusion (DEI) programs in federal contracting and grantmaking. The U.S. Equal Employment Opportunity Commission (EEOC) has also been focusing their enforcement efforts on employers’ DEI programs to ensure they don’t violate anti-discrimination laws.

As previously discussed on The Workplace podcast, in early 2025, President Trump issued a series of executive actions, including those two executive orders aimed at winding down DEI activity and infrastructure across the government and shifting federal enforcement priorities toward “merit-based” and race-neutral contracting and grantmaking. The orders were later challenged in court, and in February 2025, a federal district court issued a nationwide preliminary injunction (which the Fourth Circuit later stayed) that temporarily blocked federal agencies from terminating certain “equity-related” grants and contracts and requiring federal contractors and grant recipients to certify they do not operate DEI programs that violate federal anti-discrimination laws.

In vacating the preliminary injunction, the Fourth Circuit held the plaintiffs lacked standing to challenge one of the orders’ provisions and were unlikely to succeed on their constitutional challenges to the remaining provisions. The Fourth Circuit pointed out that its decision addressed only whether the executive orders are unconstitutional on their face, not whether any particular DEI program is lawful or whether any specific funding termination would be lawful.

EEOC Enforcement Against Private Sector DEI Programs

Although the Fourth Circuit decision primarily impacts federal contractors and grant recipients, current federal enforcement activity has also focused on DEI programs in the private sector. The EEOC announced this month that it is seeking a court order to compel a large national retailer to “produce information related to allegations that the company discriminated against white workers” as a part of its DEI initiatives dating back to 2018. Employers should take note of the EEOC’s shifting enforcement priorities, including those related to DEI programs.

As administrations change, the EEOC’s enforcement priorities often shift based on leadership and policy direction set by presidential appointees. In the press release, EEOC Chair Andrea Lucas said the EEOC will use subpoena enforcement when indicators strongly suggest that DEI-related programs may involve unlawful race-based practices, emphasizing that Title VII is “colorblind” and the EEOC is focused on evenhanded enforcement.

Title VII of the Civil Rights Act of 1964 generally prohibits employment discrimination based on race, color, religion, sex and other protected characteristics. Current EEOC guidance indicates that DEI initiatives may cross the line if an employer takes employment actions motivated — in whole or in part — by race, sex or another protected characteristic. That can include decisions involving hiring, firing, promotions, demotions, benefits, access to training, mentoring or sponsorship programs, workplace networks, internships, interview selection and work assignments.

EEOC guidance also cautions that separating employees into groups based on protected characteristics for DEI trainings or workplace programs may violate Title VII, even if the groups receive the same content or comparable resources.

Practical Steps for Employers, Contractors and Grant Recipients

Given the Fourth Circuit’s decision and the EEOC’s recent enforcement activity, federal contractors and grant recipients should review their existing and proposed contract and grant terms to ensure they align with federal non-discrimination requirements.

Employers that maintain DEI programs and initiatives should also consider conducting a DEI audit to confirm the programs are structured and administered in a way that complies with applicable non-discrimination laws.

For more information, employers can view the EEOC’s guidance related to DEI in the workplace: “What You Should Know About DEI-Related Discrimination at Work ” and “What to Do If You Experience Discrimination Related to DEI at Work.”

Vanessa M. Greene, J.D., Employment Law Counsel, CalChamber

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